The Nasdaq has found some support after Trump ruled out strikes on Iran before
the midterm elections. The prolonged stalemate, though, continues to keep the geopolitical
risk high. Over the weekend, Iran said that the US’s response to its
proposal to reopen the Strait of Hormuz was insufficient.
The negotiations to
resolve the difference are still ongoing and Iran’s Foreign Ministry
Spokesperson said today that Tehran is still reviewing US positions and will
reply via intermediaries when the review is over. This is
likely to limit any downside move in crude prices until we finally get a breakthrough.
The earnings season could bring more volatility than usual, but the focus
will remain mainly on US-Iran developments and the US CPI due on Wednesday.
A hotter than expected core CPI could raise the
probabilities for a Fed rate hike in October and weigh on the Nasdaq. A soft
report, on the other hand, will likely provide a short-term boost. There’s been
some hedging into CPI reports in the past months, so we could see some weakness
in the index ahead of the release.
NASDAQ TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On
the daily chart, we can see the Nasdaq printed a new all-time high recently but failed to extend the
gains. We have a major upward trendline defining the bullish structure on this
timeframe. If we get a pullback, we can expect the buyers to lean on the
trendline, with a defined risk below it, to position for a rally into new
record highs. The sellers, on the other hand, will look for a break lower to
the correction into the 28,750 level next.
NASDAQ TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On
the 4 hour chart, we have a minor
downward trendline defining the recent pullback. The sellers will likely continue
to lean on the trendline, with a defined risk above it, to keep targeting a
pullback into the upward trendline. The buyers, on the other hand, will look for
a break higher to pile in for a rally into new record highs, with the 31,500
level as the first target.
NASDAQ TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we
have a swing low around the 30,760 level that could act as support. The buyers will
likely step in there, with a defined risk below the level, to target a break
above the downward trendline and new record highs. The sellers, on the other
hand, will look for a break lower to increase the bearish bets into new lows,
targeting the upward trendline. The red lines define average daily range for today.
UPCOMING CATALYSTS
On
Wednesday we have the US CPI report. On Thursday, we get the US PPI, the US
Retail Sales and the latest US Jobless Claims figures.
This article was written by Giuseppe Dellamotta at investinglive.com.